Lesson from Hong Kong

On a recent trip to Hong Kong, I was surprised to see the streets of Wan Chai and Causeway Bay almost deserted at midnight. These popular spots used to be teeming with people well past midnight. Restaurants were quieter than usual, and retailers were lamenting the slow Christmas sales.

The global financial conundrums have taken its toll on this usually vibrant city. The fear and concerns were real and are visible on most faces. As an economy that relies heavily on trading, Hong Kong was one of the first to be hit. Their status as a regional financial hub did not help, as their banking system are so intricately tied to the global system that the run on money in North America and Europe rapidly affected the SAR’s own.

Yet it is interesting to see the response of the government, industry groups and business owners to the crisis. Despite a very vocal public and a resulting careful government, the SAR administration were fast to come out with solutions, including priming up public spending, introducing bank guarantees, tightening financial regulations and guaranteeing all deposits. Industry groups went into action and rallied businesses not to scale down operations drastically whilst businesses were quick to repatriate funds back to the SAR, including, unfortunately, closing many Hong Kong-owned factories in mainland China. I shall not compare these measures against ours, as it is still too early to see what works.

What I find truly amazing is the speed at which Hong Kong people accept the facts that there’s a recession, and took measures to stem it. That’s something I find shockingly lacking in our own country. Whilst it is true that our economy is relatively more broad-based, and therefore more resilient, the quiet that we see now is simply worrying. Our famous lackadaisical is at its worse now. This is especially so among people in their 20s and 30s – many of whom have not suffered through any recession, and are therefore blissfully unaware of the storm ahead. Even the efforts of this magazine over the past 3 months to offer solutions did not seem to shake people up enough.

I fear that those who will be worst affected are the newer SMEs, and entry level employees. Many of these will find it tough to weather the storm. When Hong Kong people are cooking at home rather than eating out, saving money rather than spending it on Christmas gifts and volunteering for pay cuts and extra hours rather than loose their jobs – we are still gleefully spending our reserves and demanding bigger bonuses. Yes, it’s truly beyond comprehension.

* This is part of my article in SME Magazine January 2009 edition. If you haven't had a chance to read SME, pick up a copy from your nearest news stand.